Friday, November 2, 2007

Oilman Boone Pickens has been trying for seven years to move billions of gallons of water from underneath the northeastern Panhandle to urban Texas. The plan by Pickens' company, Mesa Water, is simple: Purchase 400,000 acres in water rights, get a friendly supply district installed on a remote eight-acre plot in Roberts County that Pickens deeded to the Boones and three other employees, find a buyer for more than 65 billion gallons of water per year and build a pipeline to that customer.

Counting vote won't take long

Two hold key to $2.5 billion water pipeline in Panhandle

By MARK BABINECKCopyright 2007 Houston ChronicleNov. 2, 2007

MIAMI, Texas - Oilman Boone Pickens has been trying for seven years to move billions of gallons of water from underneath the northeastern Panhandle to urban Texas. On Tuesday, Alton and Lu Boone should put him one step closer to pulling it off.

Alton Boone manages Pickens' ranch in the region, and Lu is his wife. They're the only voters registered to approve Roberts County Fresh Water Supply District No. 1 and a $101 million bond issue in what may be the state's most unique election next week.

The Boones almost assuredly will approve everything, although they have declined to talk publicly about it.

The plan by Pickens' company, Mesa Water, is simple: Purchase 400,000 acres in water rights, get a friendly supply district installed on a remote eight-acre plot in Roberts County that Pickens deeded to the Boones and three other employees, find a buyer for more than 65 billion gallons of water per year and build a pipeline to that customer.

The water rights are in hand, but the district is key to the $2.5 billion project because it can issue tax-exempt revenue bonds and use eminent domain to buy land anywhere in Texas.

"This is the situation our legislative leaders put us in," County Judge Vernon Cook said at his Aggie-adorned desk inside the courthouse in Miami (pronounced my-AM-uh), a picturesque ranching town set on the rolling range of the northeastern Panhandle.

Cook isn't happy that the vast underground water supplies from the Ogallala Aquifer could some day be used to water lawns and fill pools in suburban Dallas-Fort Worth, but he said Pickens' people have used state laws - old and new - to their full advantage.

"I think it's ludicrous an eight-acre water district (in the Panhandle) could use eminent domain in downtown Houston," Cook said, although he noted land can only be forcibly bought to serve a public need, such as a right-of-way to move water from the Panhandle to either Dallas-Fort Worth or, less likely, San Antonio.

Fresh water supply districts have wielded such power since their creation in 1919, and there are 56 around Texas that mostly serve local areas. The difference with Mesa Water is the scope of its plan and that it's led by a famous billionaire in Pickens.

Not Pickens' first tryIt's also the first district to take advantage of new laws that loosened the residency requirements, allowing three of the district's five future supervisors (along with the Boones) to live in the Dallas-Fort Worth area.

"If you look at the mock democratic face they put on this, it's just laughably absurd, but it's the law," said Andrew Wheat, research director for Texans for Public Justice, a watchdog group. "The whole thing is a just a sham that just happens to be legal."

The lawmakers who changed the residency requirements, Rep. Brandon Creighton, R-Conroe, and Sen. Glenn Hegar, R-Katy, said they did so only to bring the rules in line with those of other districts, such as municipal utility districts.

The two men, who didn't receive unusual contributions from Pickens, and Mesa spokesman Jay Rosser all said the company didn't lobby for the changes.

Mesa did lobby for a change to the water code that will let the district string electrical lines along its pipeline right-of-way to connect the Texas power grid to Pickens' other major project, a 2,700-turbine wind farm in the Panhandle that would be the world's largest.

Rosser said the water and renewable power, working in concert, will help solve two problems for a state that will need more of both.

"What (Pickens) has developed is a private-sector solution to that problem," Rosser said.

Despite their reticence, county commissioners put the district on the ballot because the applicants met the letter of the law and that most of the water rights in the county - Cook estimates 90 percent - have been sold anyway.

Mesa tried unsuccessfully to get a district on the ballot four years ago.

"Truthfully, (Roberts County) needed some time to get comfortable with the idea," said an attorney for Pickens, Monty Humble. "As they saw more and more landowners choosing to sell their water and people in the county supported the idea of using water for municipal use."

Cook argues that the rush to sell water rights, either to Mesa or to the Canadian River Municipal Water Authority, which pipes underground water to a series of West Texas cities down through Lubbock, didn't mark a turn in public sentiment.

Rather, Cook said it was a result of Texas' long-held "right of capture" law, which basically means the water under the land is yours if you can pump it first.

"If my neighbor sells his water rights for X-hundred dollars an acre and I don't sell mine, he's going to get my water anyway ... ," the judge said. "I don't fault anybody for selling."

Cook is enthusiastic about the $10.5 billion wind plan, which he believes will give the region some economic and tax-base stability as the oil and gas industry fades.

Waiting for money to flowWhile the wind project is ready to move forward, the water still needs a buyer. Mesa has been unable to find a taker among the three major utilities in the Dallas-Fort Worth area or the San Antonio system, which hasn't shown interest so far.

Humble estimated the North Texas Municipal Water Authority is most likely to need additional water first because of the explosive growth in the suburbs its serves.

Creighton, the Conroe lawmaker, said the pipeline won't become a reality until money flows the opposite direction.

"It's interesting to read about, but in the end they've got to have a large-scale buyer to make all of that worth the effort," he said.

While conservation must factor into the future for Dallas, San Antonio and other urban areas, Humble rejects statistics showing D-FW's per capita water use outstripping that of other major Texas cities. Regions with heavy irrigated farming use much more, he said.

Wheat, the project critic, said comparing Dallas-Fort Worth to agricultural centers like Lubbock is unfair.

"They should conserve water before we suck down a historic aquifer," Wheat said. "It's a culture of conspicuous consumption in Dallas - they bridle at the notion there should be limits on it."